A recent survey by Step Change Debt Charity, found that self-employed people are struggling with debt way above their annual income. See source article Struggling strivers: self-employed face highest debt burden”
If you are in a similar position, here are some simple steps you can take to increase your income and stop struggling with debt.
Make sure you are receiving the benefits that you are entitled to: More details can be obtained from the government’s service and information website at www.gov.uk .
- Council Tax: provides help meeting your council tax.
- Housing benefit costs: Provides help towards your rent.
- Education Costs: For help with school meals, clothing or financial support for sixteen year olds staying on at school or college.
- Child Tax Credit: Paid to people responsible for at least one child.
- Working Tax Credit: Paid to people who work at least 30 hours per week.
- Disability Living Allowance: For people under 65 who have personal care needs or problems with walking because of a physical or mental disability.
- Carers Allowance: For people who regularly spend at least 35 hours a week caring for a disabled person.
- Reclaim the infamous PPI, which in some cases was mis-sold on mortgages, insurances, credit cards and other loans. Consumer champion Martin Lewis has more details on how you can reclaim this yourself without using PPI Reclaim companies (who will take a whopping 30% off any money reclaimed). For more details, visit his website at www.moneysavingexpert.com/reclaim/ppi-loan-insurance.
- Reclaim money in lost or inactive accounts. Free service at www.mylostaccount.org.uk
- Reduce your tax bill with tax efficient options. Excellent tips in our previous post “30 ways to reduce your tax bill”
- Many people work for an employer as well as running their own self-employed business. In which case, it is possible to be both employed and self-employed. If this applies to you and you have childcare with a registered childcare provider, check whether the company you are employed by provides Childcare Vouchers. You may be able to offset some of the cost of your childcare. Warning! There are tax implications, so Childcare Vouchers are not necessarily suitable for everyone. Read this handy guide by leading Childcare Voucher provider KiddiVouchers for further details.
For more serious debt problems, do seek help as soon as possible.
- If you are struggling with paying your utility bills, talk to your provider and ask if you can make a payment plan. Once you agree upon an amount that you can afford, do make every attempt to keep up your payments (for example paying by direct debit) otherwise they can cancel the agreement.
- You may be able to obtain a fuel grant to help with fuel arrears. For further details, visit (1) The British Gas Energy Trust: www.britishgasenergytrust.org.uk and (2) The EDF Energy Trust: www.edfenergytrust.org.uk. You don‘t have to be an EDF or British Gas customer to apply.
- Check whether you are eligible for the Watersure Scheme, a scheme which helps some people meet the cost of their water rates. There are specific qualifying criteria, so check first to see whether you are eligible. Please visit the Citizen’s Advice Website for further details at www.adviceguide.org.uk then type ‘Watersure’ in the search box.
- If you are struggling to meet your credit card repayments, call your credit card provider and offer a reasonable and affordable payment plan, then follow up in writing. You may be able to negotiate a freeze or reduction in your interest rate. They are not obligated to do so and some companies are more helpful than others – but you’ll never know unless you ask. Click this link for very handy letter templates you can use (available on the National Debtline – England and Wales Website)
DON’T fall prey to Debt Management Companies. They claim to write off your debt completely but will charge a fee and will add this to your debt management plan, which could prove more costly in the long run. Click this link for further details on how Debt Management Companies operate
There are reputable service providers out there who offer a completely FREE, confidential and impartial advice:
- Step Change: (Previously the Consumer Credit Counselling Service) Charity providing free debt advice: Helpline 08000 138 1111 or visit their website at www.stepchange.org
- Gingerbread: Provides expert advice, practical support and campaign for single parents. Helpline: 0808 802 0925 or visit their website at www.gingerbread.org.uk
- National Debtline: Free, confidential and independent advice on how to deal with personal debt problems. Helpline: 0808 068 6368 or visit their website at www.nationaldebtline.co.uk
- Business Debtline: Free, confidential and independent advice for self-employed people on how to deal with business debt. Helpline: 0800 197 6026 or visit their website at www.bdl.org.uk
- Citizen’s Advice Bureau: www.citizensadvice.org.uk or www.adviceguide.org.uk